Leveling the Technology Playing Field for Small and Midsize Businesses

At the SMB Innovation Lab in Shanghai, China, SAP is helping ensure small and midsize businesses (SMBs) don’t miss out on hot technologies like artificial intelligence (AI) and blockchain.

What if every piece of furniture for sale was fitted with a sensor that could transform it into a smart store device capable of engaging with potential customers nearby?

What if a retailer could combine face recognition and smart glasses technology to identify immediately when customers enter a store which products they are interested in, when they last visited, and whether they have open complaints requiring attention?

And what if SMBs could benefit, just as much as the major retail players, from innovations like these?

The SMB Innovation Lab at IKODE, a tech hackathon sponsored by IKEA.

SMBs often have limited scope to deploy technology because they lack the time or resources to keep up with the rapid pace of change. They often find themselves in a ‘Catch-22:’ Technology would help them speed up, become more efficient, and implement new business processes. But they have neither the time to be constantly on the lookout for the latest trends, nor the funds to deploy them.

Drew Bates and the SMB Innovation Lab want to ensure that SMBs in all sectors of industry benefit from the hottest technology trends – from artificial intelligence and natural language processing, to blockchain, solar-powered drones, and robots.

The small SMB Innovation Lab team, led by Michael Renz, has seven permanent employees and several fellows. It is part of the global SAP SMB group and operates on worldwide projects out of SAP Labs China in Shanghai. The team focuses on two SAP solutions for SMBs, SAP Business One and SAP Business ByDesign.

“We act as a startup poised on the shoulders of a global market leader in SMB software,” is how Michael describes his team’s role. Bates, who has been a product manager on the team since it was set up about 18 months ago, adds, “We look way ahead into the future to identify technologies that could prove to be game-changing for SMBs.”

Creating Equal Opportunities for All

Take the example of face recognition: In-Store Analytics is a project the team is working to enable bricks-and-mortar store operators to combine artificial intelligence and face recognition to create “digital footprints” for their customers. Armed with this data, they can – as has long been the case in online retail –calculate both visit duration and bounce rate, and display personal recommendations for individual customers.

Also, with the help of cameras mounted in-store, they can gauge customers’ emotions and make sure VIP customers enjoy a very special shopping experience.

“Smart glasses still have a rather spooky appearance,” says Bates, “but we expect them to become much less intrusive and more natural-looking very soon.”

“Historically, retailers were challenged to find ways to reduce costs but also leverage new technologies to help improve customer relationships. That’s not the case anymore,” says Rodolpho Cardenuto, president, Global Partner Organization, SAP. “Today SMBs have access to the same tools and services that larger organizations do. They don’t want the cheapest option, they want the best option. Now that’s affordable to almost anyone.”

SAP’s key advantage, he says, is its ability to invest heavily so that SMBs can keep up with the pace of innovation, however rapid.

Drew and his colleagues have found that there is huge interest in innovative solutions among the majority of customers and partners. “I don’t think there are any limits to their appetite or willingness to adopt certain types of innovation,” he says.

He and his team are strong advocates of cloud-based software and services because, he explains, they make it possible for SMBs in particular, to keep a handle on costs.

Many of the prototypes developed by his team can be integrated easily into SAP Business One, SAP Business ByDesign, or even SAP S/4HANA, provided a prior implementation has been successful.

Growing Importance of Partners

Naturally, partners play a key role in this segment. Just recently, Bates and his colleagues took to the road for several weeks to present their projects to partner organizations with marked success: More than 30 partners have now begun building face recognition into their retail solutions.

“We serve SMBs across a wide range of industries, with professional services, retail and small manufacturing being the top three,” says Meaghan Sullivan, head of Global Partner Marketing for SAP. “We make sure they all benefit from the same innovations our largest customers do,” Meaghan says. “In fact, last quarter, more than half of the new SAP S/4HANA platform customers were SMBs, and many are starting to embrace new innovations like machine learning and AI,” she added.

Obviously, not every project is a winner. “In fact, most of our ideas may not proceed beyond the first rounds,” says Bates. And there is certainly no hemming and hawing in the decision-making process. “Our development sprints last two weeks,” he reports. “After that, we decide whether we want to end the topic, add it to the product managers’ backlog, or carry on working on it.” The team always learns something along the way and documents everything precisely, he says, “because it often happens that we later find the impetus to pursue an idea further down the line.”

If you want a project to reach a point where you can decide on its future, you must focus, says Bates. Aspects such as the data platform, security, and compliance are not factored in initially. “What we ask ourselves is this: If we didn’t have to worry about those things right now, would we have an idea that is worth pursuing?”